L-3 Drives Overbought Defense Contractors Down

LLL (NYSE) -$11.54 or -7.76% dragging the entire defense sector down.  Gives another chance at bearish position on LMT.

Earnings Beat

Our consensus called for third quarter EPS of $1.82, and the company reported adjusted EPS of $1.88.

Revenue Miss

The company posted revenues of $2,505 million in third quarter, compared to our consensus estimate of $2,561 million.

Reiterate, For Speculative Accounts Only, recommend purchase of LMT 1/20/2017 $225 out of the money puts, bid $1.70, ask $2.20.  Try to split the difference for $1.90-$1.95.

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